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(Bloomberg) -- Oil’s advance to the highest since 2014 is squeezing the carry-trade returns on the Indian rupee to a point where they are the worst in Asia.

While the nation’s nominal yields are the second-highest in Asia, rupee weakness is making the trade unprofitable. Borrowing in dollars to invest in India would yield a negative 3.4 percent for the year so far, according to data compiled by Bloomberg. That trade garnered a carry return of 12 percent in 2017.

“Oil’s surge may be a reason why the pipeline risk premium concern may be an offsetting factor for an otherwise alluring yields and underlying growth story,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “Worries about fiscal slippage and rupee uncertainty could add to the investor being circumspect.”

Crude prices have jumped 67 percent since June, touching the $70 a barrel level last seen when Prime Minister Narendra Modi took power four years ago. The cost increase in India’s biggest import item widens its current-account and fiscal deficits, and has turned the currency into Asia’s worst performer.

Further declines in the currency may spur the Reserve Bank of India to consider tightening to keep inflation at its 4 percent target. Deustche Bank AG and DBS Bank Ltd. are among lenders citing the weak rupee as a key reason for the central bank to raise rates faster than what most analysts are forecasting.

The rupee was down 0.4 percent to 67.1325 at 2:25 p.m. in Mumbai, breaching the 67 to a dollar mark for the first time since Feb. 2017.

“We expect to see further foreign portfolio outflows from the market in the coming weeks, which would hasten the rupee to test the next support at 67.30,” Param Sarma, chief executive at NSP Treasury Risk Management, wrote in emailed comments.